Oil opens August on the downside, WTI in play below $70

Daniel Fowler
August 4, 2018

USA crude lost nearly $8 over as many days during the same period.

On Tuesday, the EIA reported that us crude production fell 30,000 barrels per day to 10.44 million bpd in May.

Oil prices fell on Wednesday after industry data showed US stockpiles of crude unexpectedly rose, starting the new month in negative territory after the largest monthly decline in two years in July.

Signs that a supply disruption in the Bab al-Mandeb Strait in the Red Sea could be resolved weighed on prices.

The Reuters survey showed OPEC increased production 70,000 barrels per day (bpd) to 32.64 million bpd in July, the most this year. US crude futures fell $1.37, or almost 2 percent, to settle at $68.76.

The initial deal, under which OPEC and non-OPEC producers are cutting supply by about 1.8 million barrels per day, had expired in March 2018.

West Texas Intermediate crude for September delivery traded at $69.87/bbl on the New York Mercantile Exchange, down $0.26, in London.

Oil prices were mixed on Monday with US benchmark WTI nudging higher after four weeks of declines, while Brent began the week lower as the fallout from trade tensions weighed on markets.

"Oil prices, which were on the rise on concerns of tightening supply, and growing desperation that the loss of Iranian oil supplies would not be easily replaced, may have found a ray of hope", he said in a daily emailed market report. The survey aims to track supply to market and is based on shipping data provided by external sources, Thomson Reuters flows data and information provided by sources at oil companies, OPEC and consulting firms.

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Yesterday, the commodity fell sharply after private data from the American Petroleum Institute showed a larger-than-expected build in United States crude stocks.

WTI price declined by 1.32 percent while Brent's loss was pared at 0.32 percent.

Yemen's Houthi group said it was ready to halt attacks in the Red Sea to support peace efforts. On June 22-23, OPEC, Russia and other non-members agreed to return to 100 percent compliance with oil output cuts that began in January 2017, after months of underproduction in Venezuela and elsewhere pushed adherence above 160 percent.

Russia, Saudi Arabia and other producers last month agreed to boost production last month provided output remained below caps they agreed to in 2016.

Oil also slipped on more ample supplies.

Russian oil production last month was on average above the level Moscow promised following the Organization of the Petroleum Exporting Countries and non-OPEC meeting in June, energy minister Alexander Novak indicated on Wednesday.

Here is a look at how share prices for two blue-chip stocks and two exchange traded funds reacted to this latest report.

Concern over slowing economic growth because of a trade dispute between the United States and China is also putting downward pressure on the market.

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